Buying Land and Building a House on it - Selection of Construction Company and Construction Costs

Once you have decided on the area in which you want to live, the image of your home, and your approximate budget, you can start choosing a company to ask for construction of your house. Some companies may assist you in finding land, or may introduce you to their own “Land lot subject to construction of a house”. Sharing the image of the house you want to build with the construction company may facilitate the land search process.

1. Types and characteristics of construction companies

A construction company is generally a house builder, building contractor, design office, etc., and each has the following characteristics.

House Builders

They are major residential construction companies operating on a nationwide scale

-The systematization of materials, products, design, and construction processes ensures stable quality and a sense of security.

-The company's own research and development and the latest technologies are used to build high-performance houses.

-There is a model house, so you can see the actual housing products.

-The companies have established their own long-term warranty and after-sales maintenance systems.

-Types of houses to be built varies depending on the company, such as wooden, steel-framed, and reinforced concrete.

-Since specifications and designs are standardized, it may be costly to accommodate free design, such as the use of non-standard products.

-Many companies have a good support system for housing loans and offer affiliated loans with lower interest rates than average housing loans.

Building Contractors

They are small to medium-sized, community-based residential construction companies.

-Proposals can be made that are suited to the local climate and area conditions.

-There is a high degree of freedom in design because they have no standardized products.

-Flexible proposals can be made for narrow or deformed lands, as well as for particular floor plans.

-It is difficult to find a construction company that meets your needs because each construction company has different skills and proposals, and different areas of expertise and characteristics.

Design Offices

They are offices with architects who design and supervise buildings. In general, a design office specializes in design, and construction is outsourced to a building contractor.

-The degree of freedom in design is the highest, and the ability to propose plans and respond to requests is excellent, so they can reflect your particular needs.

-Planning that makes the most of the land shape is possible even on narrow or deformed land with a low budget.

-Design fees and supervision fees are higher than those of house builders and building contractors.

2. How much does it cost to build?

How much does it cost to build a house? A custom-built house can be said to be flexible according to your budget, because you choose everything from the floor plan to the equipment and interior design yourself. Let's look at the data and check the approximate construction cost to see how much you can spend and what grade of building you can build.

What is the average size and construction cost of a custom-built house in Japan?

According to the 2023 Flat 35 user survey, the national average housing area for custom-built houses is approx. 119.5M2, and the national average for construction costs is JPY38.61 million. Looking at the data for the Tokyo metropolitan area, the average housing area is 120.4M2, which is not much different from the national average, but the average construction cost is JPY41.9 million, suggesting that construction costs are higher in the Tokyo metropolitan area. In central Tokyo, the cost tends to be 10-20% higher than the national average, because of the need for a higher level of foundation work and structural calculations due to the smaller land sizes, as well as higher material transportation and labor costs.

Features of Houses by Price Range

Now, let's take a look at the features of the houses that can be built in different price ranges.

Nationwide, the largest number of people build in the JPY20–30-million range, while houses in the JPY40 million range and above can be considered high-grade. Depending on the construction company, it can be built for as little as JPY10 million to keep costs down.

Houses in the JPY10 million range

These are considerably lower than the average price range and are houses with a low-cost design. The cost of materials for exterior walls and roofs is reduced by making the floor plan rectangular or square, and costs are kept down by simplifying the exterior appearance, such as by using a mountainous gable roof or a single-slope roof sloping in one direction. Construction companies that specialize in low-cost housing are able to build at reasonable prices by preparing basic design plans, purchasing large quantities of standard specification equipment and building materials to keep costs down, and devising ways to eliminate labor costs in the process from design to construction. It is a good idea to ask a local building contractor or a construction company that specializes in low-cost housing.

Houses in the JPY20 million range

Compared to the JPY10 million range, this price range offers more possibilities to realize your particular needs, but if you incorporate all your wishes, you will end up exceeding your budget. It is a good idea to consult with the person in charge of the construction company in advance about the wishes you want to achieve, such as whether you want a large living room or a kitchen and bathroom with the latest equipment, and choose a company that can make proposals that meet your wishes within your budget range. Consider a local building contractor or small or medium-sized construction company.

Houses in the JPY30 million range

With JPY35 million, a house of average grade and size can be built. For JPY35 million or more, you can build a larger house with 130M2 or more and have a wider range of choices, including higher grade equipment and building materials. This is a price range that allows you to create a house that meets your particular wishes. Even if the land is irregular rather than well-shaped, it is possible to design a house that makes effective use of the shape of the land.

Custom-built houses are generally built with a wooden or steel frame, and in the JPY30 million range, a wood-frame house can be built up to approx. 150M2, while a steel-frame house can be built up to approx. 100M2.

Houses in the JPY40 million range

Relatively high-grade houses can be built. Even for those who are particular about their homes, a variety of plans can be realized at this price range. Plans with distinctive exterior features such as a courtyard house, the use of natural materials, and a highly functional house can be realized without worrying about keeping the budget down. It is a good idea to choose a construction company that can realize your particular needs in terms of construction methods, design, and housing performance.

Note the costs other than construction costs!

The construction cost, which includes all construction costs necessary for building construction, such as building foundation, exterior work, interior finishing, and housing equipment and facilities, is called the house price. To build a house, in addition to the house price, there are ancillary construction costs such as land development costs, water and sewer installation costs, external works and landscaping costs. In addition, there are various costs, including taxes and administrative fees required for real estate registration. What the house price, incidental construction costs, and miscellaneous expenses include varies depending on the construction company, so please check with the construction company beforehand for a detailed breakdown of costs and expenses.

Select a construction company by comparing construction costs.

When comparing many construction companies, one way is to refer to the "unit price per tsubo", which is an index that represents the construction cost of the construction company. The tsubo unit price is a calculation of the construction cost per tsubo* (about 3.3 m2) of building floor space and is a rough estimate of how much a house can be built for.

For example, if the house price is JPY20 million and the total floor area is 40 tsubo, the unit price per tsubo is JPY500,000. The total floor area is the sum of the floor area of all floors.

House builders and construction companies have their own specialties and characteristics, such as construction methods, design, and housing performance.
The unit price per tsubo can be said to be an index that represents the rough grade of construction, so it is recommended to use it only as a reference when choosing a construction company that meets your budget, after understanding the specialty and characteristics of the construction company.

3. English-speaking Architecture Firms

To build your ideal home, it is important to choose a construction company that can fulfill your wishes within your budget. The person in charge of the construction company will consult with you about various details such as design plans, budgets, equipment, and building materials, so you want to ask a reliable company. However, many foreigners who are not accustomed to communicating in Japanese may find the house-building process very difficult and uneasy. Here, you will find architectural firms that can consult with you in English regarding the construction of your home.

>> English-speaking Architecture Firms / Architects in Japan

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